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Fema violation in 2G spectrum scam Rs 10,000 crore: ED

TNN | Updated: Sep 2, 2011, 6:59 IST

NEW DELHI: Enforcement Directorate on Thursday startled the Supreme Court by informing that companies involved in the 2G spectrum scam had violated Foreign Exchange Management Act (Fema) to the tune of Rs 10,000 crore. Senior advocate KK Venugopal, appearing for ED, pleaded with a bench of Justices GS Singhvi and AK Ganguly for six more months time to complete the probe while saying that the money trail abroad was getting longer and longer. The bench asked the agency to complete the investigations in three months. The ED said it had detected Fema violations to the tune of Rs 9,929.80 crore and under rules, the agency could slap a fine three times the violation. This means, ED under the Fema procedures could slap a penalty of nearly Rs 30,000 crore, which was the quantum of loss to the exchequer estimated by CBI due to alleged irregular allotment of spectrum in 2008 by then telecom minister A Raja. It said so far properties worth Rs 223 crore had been attached, mainly relating to the Rs 200 crore paid allegedly by DB Group's Shahid Balwa to DMK controlled Kalaignar TV as a quid pro quo for spectrum to Swan Telecom. Venugopal said ED's investigations had spread to Jersey Islands, Isle of Man and Cyprus from where foreigg investments came into telecom companies through a large number of front companies. "Documents obtained on the basis of letters rogatory issued to Cyprus disclosed 7 new front companies in Channel Island. We will now be sending LRs to Channel Island to get details of the transactions," he said.

The ED informed the bench that it was examining transactions involving around 350 accounts, of which nearly 200 were intimated by the Financial Intelligence Unit (FIU) which keeps track of suspicious movement of money in foreign accounts. It said FIU was equipped to receive information from across the world about banking transactions in excess of $10,000. The Income Tax department through senior advocate Mukul Gupta submitted a 121-page status report to the bench and said it would be completing the first batch of assessment for the year 2008-09 by December 31.